This document provides guidance on estimating costs for projects. It discusses key components of a cost estimate including direct costs, indirect costs, and specific expense categories like labor, materials, equipment, etc. It also outlines assumptions that should be documented in a basis of estimate report. Accurate cost estimation is important for project feasibility assessments, budgeting, and avoiding cost overruns. The document recommends using project management software to help plan budgets and track costs against estimates.

1. This is a two step process.
First write a one-page paper in which you use the highlighted
included references:
Outline the process you would use to move to a centralized
structure.
Go back to the Week 3 assignment, Organizing HR Projects, and
consider the goal of the project.
Conduct research on centralized and decentralized organizations
and come up with three tasks that you would need to move to a
centralized structure.
Consider methods for assigning costs to tasks and come up with
the process (not the actual budget) that you would use to
determine a budget.
Write a one-page paper outlining the process you would use. I
have color coded all of the resources
Create a WBS for the project and analyze each task using
the Project Budget WBS Template [XLSX]. See attached
Review, as needed, the following sites regarding cost
estimation:
The Ultimate Guide to Project Cost Estimating.
Cost Estimation for Projects: How to Estimate Accurately.
Secondly, it is now important to consider your approach to
leading and managing your HR project. Tightly structured
projects tend to restrict cross-organizational communication. As
such, objectives originate at the top of the project and are
subdivided as they are passed down, resulting in little
opportunity for creative contributions. Effective leadership and
managing of the project can greatly improve communication and
team contributions.
Write a 6–7 page paper in which you:
1. Select two types of project management power that would be
relevant to your current project, and explain your rationale.
· Be specific.

2. 2. Identify and briefly discuss a minimum of four outcomes
(possible issues) resulting from managing projects, and address
how you might resolve the issues. Be clear with your rationale.
3. Discuss two increased challenges a project manager may face
when leading virtual or global project teams.
4. Recommend three strategies to deal with the challenges.
5. Identify and explain your overall plan for communication
management during the project. The plan must be
comprehensive and at a minimum address structure, purpose,
method, and timing.
6. Use four sources to support your writing
The Ultimate Guide to Project Cost Estimating.
Cost estimating is the practice of forecasting the cost of
completing a project with a defined scope. It is the primary
element of project cost management, a knowledge area that
involves planning, monitoring, and controlling a project’s
monetary costs. (Project cost management has been practiced
since the 1950s.) The approximate total project cost, called the
cost estimate, is used to authorize a project’s budget and
manage its costs.
Professional estimators use defined techniques to create cost
estimates that are used to assess the financial feasibility of
projects, to budget for project costs, and to monitor project
spending. An accurate cost estimate is critical for deciding
whether to take on a project, for determining a project’s
eventual scope, and for ensuring that projects remain financially
feasible and avoid cost overruns.
Cost estimates are typically revised and updated as the project’s
scope becomes more precise and as project risks are realized —
as the Project Management Body of Knowledge (PMBOK)
notes, cost estimating is an iterative process. A cost estimate
may also be used to prepare a project cost baseline, which is the
milestone-based point of comparison for assessing a project’s

3. actual cost performance.
Key Components of a Cost Estimate
A cost estimate is a summation of all the costs involved in
successfully finishing a project, from inception to completion
(project duration). These project costs can be categorized in a
number of ways and levels of detail, but the simplest
classification divides costs into two main categories: direct
costs and indirect costs.
Direct costs are broadly classified as those directly associated
with a single area (such as a department or a project). In project
management, direct costs are expenses billed exclusively to a
specific project. They can include project team wages, the costs
of resources to produce physical products, fuel for equipment,
and money spent to address any project-specific risks.
Indirect costs, on the other hand, cannot be associated with a
specific cost center and are instead incurred by a number of
projects simultaneously, sometimes in varying amounts. In
project management, quality control, security costs, and utilities
are usually classified as indirect costs since they are shared
across a number of projects and are not directly billable to any
one project.
A cost estimate is more than a simple list of costs, however: it
also outlines the assumptions underlying each cost. These
assumptions (along with estimates of cost accuracy) are
compiled into a report called the basis of estimate, which also
details cost exclusions and inclusions. The basis of estimate
report allows project stakeholders to interpret project costs and
to understand how and where actual costs might differ from
approximated costs.
Beyond the broad classifications of direct and indirect costs,
project expenses fall into more specific categories. Common
types of expenses include:
Labor: The cost of human effort expended towards project
objectives.
Materials: The cost of resources needed to create products.
Equipment: The cost of buying and maintaining equipment used

4. in project work.
Services: The cost of external work that a company seeks for
any given project (vendors, contractors, etc.).
Software: Non-physical computer resources.
Hardware: Physical computer resources.
Facilities: The cost of renting or using specialized equipment,
services, or locations.
Contingency costs: Costs added to the project budget to address
specific risks.
Cost Estimation for Projects: How to Estimate Accurately.
Cost Estimation for Projects: How to Estimate Accurately
Good cost estimation is essential for keeping a project under
budget. Many costs can appear over the life cycle of a project,
and an accurate estimation method can be the difference
between a successful plan and a failed one. Estimation,
however, is easier said than done. Projects bring risks, and risks
bring unexpected costs.
Cost estimation is the process that takes those factors into
account, and calculates a budget that meets the financial
commitment necessary for a successful project. Project cost
estimation applies to everything from building a bridge to
developing that new killer app. It all costs money, so the clearer
you are on the amount required, the more likely you’ll achieve
your objective.
Cost estimation is simplified with the help of project
management software like ProjectManager. Add budgets for
your projects, planned costs for specific tasks and include labor
rates for your team. When you build your plan on our Gantt
chart, your estimated costs will be calculated automatically.
Plus, as the project unfolds, you can track your costs in real
time on our automated dashboard.